Magna Sees Linear TV Spending Down 3% - Broadcasting & Cable

Magna Sees Linear TV Spending Down 3%

Agency sees softening of scatter pricing
Author:
Publish date:
Money-(Pictures-of-Money)_10.jpg

Linear national television advertising revenue is expected to fall 3% to $42.8 billion in 2017, according to a new forecast from media agency Magna.

Magna says the drop is the result of a comparison to last year’s Olympic Games and a strong year in general, softening of scatter pricing and weak demand from key categories including automotive, food & beverage and pharmaceuticals.

Pharma spending is pegged to rise 3%, but that’s a much smaller rise than a year ago.

Related: Analyst Warns of Possible Recession in TV Ad Market

Magna says that from the second half of 2015 through 2016, strong pricing offset declining ratings, resulting in good gains for linear TV. But so far in 2017, ratings are decreasing as fast if not faster while pricing growth hasn’t kept up.

For all of 2017, Magna forecasts that ad sales at English-language broadcast networks will decline 6% to $13.7 billion and that national cable ad sales will drop 1% to $25.8 billion. Spanish-language network revenue will drop 3.5% to $1.5 billion.

Excluding the political and Olympic spending during 2016, base 2017 ad revenues will fall 3% for English language broadcast, national cable will be flat, bringing national TV as a whole to a 1.4% decline.

Related: Media Agency Execs Size Up 2017-18 Broadcast Shows

For 2016, Magna says broadcast was up 0.7%, cable grew 1.5% and total national TV gained 1.1%.

Local TV ad revenues will drop 13% to $20 billion in 2017, partly because of the absence of election year spending local stations saw in 2016. Excluding campaign spending, local TV ad revenue will be down 3%.

Magna says local stations will suffer from lower spending by auto dealers, restaurants and retailers.

Related: one2one Media Addresses Ads for Home Entertainment Clients

Local spending will rebound in 2018 as election spending ramps up again, Magna says.

Digital media ad sales will increase by 14% to $83 billion in the U.S. in 2017, Magna projects. Digital will account for 45% of all media spending and by 2019 it will surpass $100 billion and account for half of all ad spending.

(Photo via Pictures of Money's FlickrImage taken on Sept. 17, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 16x9 aspect ratio.)

Related